Which of the Following Explains Why Small Reductions in Interest

question 1

Multiple Choice

Which of the following explains why small reductions in interest rates may not lead to an increase in investment spending?

• A)Excess capacity gives businesses little incentive to expand production capacity.
• B)Investment demand is elastic with respect to the interest rate.
• C)Improved expectations shift the investment demand curve to the right.
• D)Banks are eager to make loans at the lower interest rate.

---

Definitions:

Apgar Scale

A quick test performed on a newborn at 1 and 5 minutes after birth, measuring five criteria to evaluate the baby's condition.

Brainwave Activity

The patterns of neuronal electrical impulses in the brain that are detectable with an electroencephalogram (EEG), related to different states of consciousness, sleep, and cognition.

Psychotic Features

Symptoms associated with psychosis, including delusions, hallucinations, disorganized thinking, and lack of insight.

Postpartum Depression (PPD)

Postpartum Depression is a complex mix of physical, emotional, and behavioral changes that happen in some women after giving birth, characterized by depression and anxiety.